As we reported here last Thursday, World Wrestling Entertainment (WWE) has obviously been concerned that their recently leaked tax affairs will affect Linda McMahon's chances of being elected in two weeks time. The revelation that WWE came to a $4.4 million settlement with their home state after a disagreement about whether they applied for a discounted tax rate due to a "broadcaster exemption" led to a flurry of emergency PR activity. They promptly arranged a round of conference calls with the local media and issued an urgent press release entitled "WWE Pays Its Taxes" in an attempt to quickly cut off the accusations that Linda McMahon was a tax dodger. There was also speculation that due to the huge sums WWE had collected in state tax credits, they were in the business of selling them at a profit.
That suspicion proved to be true, as Don Michak of the Journal Inquirer, thankfully off his high horse for the time being, (about the immorality of WWE programming during the Attitude Era) has uncovered evidence that WWE sold over 90% of the state film tax credits it received from 2007-2009:
"World Wrestling Entertainment Inc., the company co-founded by Republican U.S. Senate candidate Linda McMahon and now run by her husband, sold 93 percent of the $14.8 million in state film and infrastructure tax credits it collected for work done while McMahon headed the company, state records reveal.
The state Department of Economic and Community Development records don't show to whom WWE transferred the $13.8 million in tax credits."
WWE spokesman, Brian Flinn, once again defended the practice, as it's perfectly legal and they have an obligation to their shareholders (it's worth remembering that the McMahon family owns the majority of WWE stock) to take advantage of any such financial wheeling-dealing that the state allows:
"As permitted by the state of Connecticut, WWE uses state tax credits where available to offset its state tax liability to the extent allowable. Any credits that are in excess of WWE's tax liability are assigned to a broker, who then sells them to companies also looking to offset state tax liability. WWE does not have access to information on who purchases these credits."
However, financial guru David Cay Johnston, called such selling of tax credits:
"A subtle form of redistribution upwards in which the few take from the many in ways that are not obvious. It's how many of the wealthiest in America, while posing as entrepreneurs and captains of capitalism, are in fact on welfare. At a minimum, their incomes are being subsidized."
This latest disclosure of confidential WWE financial information once again makes McMahon look a bit of a hypocrite, as in the past she's been quoted as saying that she wanted "an end to corporate welfare" and supported "eliminating all of these tax credits, except those for charitable deductions".
Irv Muchnick's immediate reaction on Twitter upon hearing the news was the following:
Cue "Stand Up for WWE II." Blumenthal did zero re WWE independent contractor abuse. If Murphy wins CT-Sen, will he tackle film tax credit scam? Don't hold your breath.
I wouldn't either, even though Murphy seems much more offended by Linda's personal attacks than Richard Blumenthal was, but support for what Muchnick has dubbed McMahonism crosses party lines, so even if he was up for the fight, he would probably only make very limited progress on ending this particular corporate cash grab.